Bringing a car back to Ireland after living abroad

M3CS

I've been offered the chance to relocate to Spain for a period that will amount to a year at the very least (possibly two). I'm sure I've read several posts on this site about how you can bring a car back to Ireland and not be liable for VRT as long as you've owned it for six months or more while living in another country. I have a car in mind that I'd like to buy and eventually bring back to Ireland without having a ludicrous 41% VRT bill waiting for me on arrival.

To avail of this, does the car that I'm hypothetically bringing back to Ireland have to be registered in the country that I was residing in (Spain)? I'm guessing it would have to be registered to a Spanish address to prove that it was mine during the time that I lived there - or, for example, could I buy a UK registered car and bring that to Spain for a year and then bring it back to Ireland? The reason I ask is because it would be easier to find a suitable RHD car in the UK which would be a better long term proposition as I will intend to return to Ireland at some point. I'm guessing bringing a UK registered car home with me after living in Spain wouldn't be looked at favourably by Revenue.

If it's not a runner then I'll be happy enough to play it safe and go for a LHD car.

You need to read the Transfer of Residence (TOR) section on Revenue page, it outlines what you need to do. Be aware, they will scrutinise all your paperwork so you have to show registration documents, rental/purchase agreement of address outside state, proof you lived there for the required period to avail of tax relief on your car, car purchase invoice, car insurance etc, etc. Whether you can register the car outside the EU, in the UK, then live in the EU, Spain would be a question for Revenue. If you bought in UK and registered in Spain, it’s probable you would have to go through a similar importation process there, then have to go through it again to bring it from Spain to Ireland.

It would probably make more sense, if you had the means and the VAT/VRT equivalent is lower in Spain, to order a new RHD through a Spanish dealer and hold on to it for a year.

Marcusm

https://www.boards.ie/discussion/2058301889/bringing-a-car-back-to-ireland-after-living-abroad

If you are going for a transfer of definite duration then there are limitations on qualifying for the TOR to bring the car back to Ireland. If you are out for 2 years the you should be able to qualify to bring a car back provided by the time of your return you had owned and operated the car for 6 months prior to coming back and had acquired it under normal taxation rules in that country. Trying to bring a bUk reg’d car back from Spain will get you nowhere. Taking a U.K. car to Spain would likely attract VAT, possibly import duty and any Spanish equivalent of VRT (I know of the Portuguese equivalent but not the Spanish one).

However, all is not lost as there are plenty of RHD cars in Spain or elsewhere in the EU. If they are in Spain you would not have any Spanish equivalent of VRT, if elsewhere you would. Don’t buy a U.K. reg’d car in Spain or elsewhere as it will be costly to formalise.

If you are looking for a modestly priced or a super car then I think you’ll have no problem because lots of those were exported. Less common with more modern, non-premium lines.

bazz26

Afaik the car needs to be registered in the person's name who is applying for the VRT exemption otherwise how would Revenue know it belongs to you or how long you have owned it to qualify for the VRT exemption. Revenue will also look for proof that the car is in use during that time i.e. it's taxed and insured during that period so you cannot just buy a car and lock it away in a shed for 6 months to qualify for the VRT exemption.

I also think if you wanted to bring it into Spain via the UK then you would still be liable for Spanish VAT, import duty and whatever registration tax they may have as your still importing it into an EU member state. I'd imagine you would then have to re-register it, tax it and insure in Spain for at least 6 months in order to apply for the VRT exemption when moving back here under TOR.

Seems like a lot of hassle there so you would want to be working out what savings your making by doing that versus buying the same car already in Spain.

M3CS

I thought that would be the case regarding the UK registered car - thanks for confirming. In that situation it would be registered in my name to a friends UK address but I wouldn't be able to prove that the car was used (serviced, MOT'd, etc.) in the UK for the time that I owned it so I'll forget about that idea.

I'll aim to find a car in Spain but, as it's a relatively rare model, I'll likely keep an eye out around mainland Europe in general. If I do find one somewhere such as France or Italy then it seems that the top rate of VRT in Spain is 15.9% of the cars value - slightly more reasonable than the 41% I'd have to pay in Ireland.

Del2005

Where are you getting the top rate is 15.9%? According to this site it's 21% and you've 10% duty also.

One of the largest costs to be aware of when registering a car from the UK in Spain is customs duty and IVA. The customs duty is currently 10% and the IVA sits at 21% of the cost of the vehicle.

Registering a UK Car in Spain 2023 (eurococ.eu)

M3CS

https://www.boards.ie/discussion/comment/120751172#Comment_120751172

A quick Google of "Spain vehicle registration tax" brings up an excerpt from a website that states "Registration tax will be somewhere between 0% and 15.9% of the vehicles value with the calculation being based on both the value and the CO2 emissions". I didn't look beyond that to be honest as I'll try my best to find a car in Spain. 21% doesn't seem so bad in any case.

Would customs duty apply If the car was being imported from another EU country?

Del2005

No customs duty if imported from another EU country. The only thing to look out for is that it has over 6,000km and older than 6 months, otherwise you'll be paying VAT where you register it.

Marcusm

https://www.boards.ie/discussion/comment/120748978#Comment_120748978

Absolutely no chance to get TOR for a U.K. reg’d car at a friends address. You need to provide evidence of the car where you live and work not merely somewhere overseas. You also have to be using it. In one Tax Appral case, a woman who had been living in the U.K. for many years bought a car 6 months before moving to Ireland but spent a lot of that period travelling outside the U.K. on holidays and garaged the car. Was held not to be used and relief denied. In a recent case (involving €83k of VRT, some car), the person acquired it 6 months before returning but his wife returned before him, he took a remote job for an Irish entity and was again denied relief. The conditions are not easily overcome.

M3CS

https://www.boards.ie/discussion/comment/120752530#Comment_120752530

Interesting. Thanks for the insight, particularly that last part - I'll read up on it all over the weekend.

M3CS

https://www.boards.ie/discussion/comment/120752530#Comment_120752530

Do you know if this appeal was published or if there's a link to it anywhere that I could read it?

dbs103

https://www.boards.ie/discussion/2058301889/bringing-a-car-back-to-ireland-after-living-abroad

How about you don't try to avoid what you have to pay and just pay the VRT/Tax that you owe.

https://www.boards.ie/discussion/comment/120857188#Comment_120857188

Nothing wrong whatsoever in using the provisions in the law to avoid tax, perhaps you are confusing it with tax evasion where the person refuses to pay what is legally owed. If the op uses TOR provisions as laid out by Revenue, he/she has every right to try and legally avoid VRT, same as anyone else moving full time residence to Ireland.

Del2005

https://www.boards.ie/discussion/comment/120857188#Comment_120857188

The exemptions are set out so if done correctly then they don't owe any VRT or Tax. Don't worry if they don't have all their paper work correct then Revenue will hit them with taxes.

dbs103

https://www.boards.ie/discussion/comment/120857356#Comment_120857356

The OP is clearly trying to find a loophole so they can buy a cheap car and avoid paying VRT on it. If it was genuine they would just buy the car in Spain, drive it for the year they were there and then use TOR when moving back from Spain.

This buying in one country to move it to another, or trying to buy it in the UK and use someone else's address there while actually driving it in Spain, and then bringing it back to Ireland smacks of a grift.

https://www.boards.ie/discussion/comment/120877027#Comment_120877027

If a loophole exists, and it is legal to use it to avoid tax, then drive through the loophole. If the op is doing something illegal, then of course that is wrong, otherwise, get off your high horse you ass.

dbs103

https://www.boards.ie/discussion/comment/120877053#Comment_120877053

Straight out of the Bertie Ahern handbook.

Del2005

https://www.boards.ie/discussion/comment/120877027#Comment_120877027

It's perfectly legal to use loop holes to avoid tax, why do you think people pay accountants to file their taxes? If the government is loosing too much money from the loop holes they will close them.

There's a clearly defined process to avoid paying taxes on a vehicle imported after living abroad for >12 months. If they can tick all the boxes they will legally avoid the tax, if they try to game the system they will pay the taxes due.